"I think what viewers have to appreciate is, this is a millennial story," Fundstrat's Lee said Tuesday on CNBC's "Squawk Box." "The average millennial is 25 today. The boomers were 25 in 1982, so what did the boomers drive from 1982 to the peak population of the boomers, which was '99? The S&P 500."

"Millennials have great interest in digital businesses, social media and bitcoin," Lee said, adding that "the millennial population is not going to peak until 2040."

Lee was chief equity strategist at JPMorgan before co-founding Fundstrat in 2014. He is the only major strategist on Wall Street to issue price targets for bitcoin and expects the digital currency to hit $11,500 by the middle of next year and $25,000 by 2022.

Source: Deutsche Bank

The S&P 500 has climbed more than 18 percent this year to record highs, while bitcoin has surged 1,700 percent to above $17,000. Major exchanges such as the Cboe and CME are vying to launch bitcoin derivatives products, which could allow institutional investors to buy into the cryptocurrency trend and pave the way for a bitcoin exchange-traded fund.

An October survey found 27 percent of millennials would prefer to invest in $1,000 of bitcoin versus the same amount of stocks. Harris Poll conducted the online survey of more than 2,000 U.S. adults on behalf of cryptocurrency venture capital firm Blockchain Capital.

However, CNBC also reported in October that Vlad Tenev, co-founder of stock trading app Robinhood, expects stocks to stay in favor. At the time, about 78 percent of Robinhood's more than 2 million customers fall into the so-called millennial category, those ages 18 to 35.